Holman Jenkins of the Wall Street Journal writes an excellent op-ed piecechallenging Google's efforts to take on AT&T and Verizon in the mobile world. Google, of course, wants to open up the mobile Internet so that it can farm it as it does the PC Internet: advertising everywhere.
But as Jenkins notes, Google may be at a technology, political, and infrastructure disadvantage in going up against the telcos:
When they're done [rolling out fiber optic networks], the telcos will have not just the preferred platform for delivering high-def, on-demand and interactive services. They'll have several advantages over their would-be rivals, whether Google or Microsoft or the cable companies. One is their history as phone companies, in the form of systems for billing and tracking individual customers in their usage.
A second is their choice of technology: Unlike cable or satellite, true Internet TV means delivering individualized TV streams to each user on demand, rather than broadcasting the entire spectrum of channels to the user's set-top box.
Why is this important? In the normal course of service, they will be able to track which stream the user is watching and when (and, of course, users will no longer be bound by program schedules). Not only will the telcos be better able to implement the necessary network "intelligence" to help you sort out the digital cornucopia. Information about what you watch is also information about what advertising you're likely to respond to, what products and services you might be interested in buying. (That's Google's business model, of course.)
Notice that? The telcos will be able to out-Google Google in the home and given that they also own the wireless channels, they should be able to package advertising for mobile phones based on what you watch at home. Did you pause to watch the sale of that figurine on the Home Shopping Network? Why not just buy it as you walk past the figurine store at the mall?
Futuristic, yes. But it's not hard to see that Google may struggle in markets where the networks aren't open. The PC is a relatively open platform in that it is a gateway to a wide open network, the Internet.
But television/cable still relies on closed networks, as does mobile. Google's model doesn't work well in this world. Perhaps it will need to buy its own networks. Or perhaps it will find a way to morph the model to fit the closed networks.
Either way, Google has a real fight on its hands.